EXHIBIT 1.A(3)(B)
SELECTED BROKER AGREEMENT
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Agreement dated ______________, 1997, by and between Metropolitan Life
Insurance Company ("Metropolitan" or "Distributor"), a New York corporation, and
__________________ ("Broker"), a _________________ corporation.
WITNESSETH:
In consideration of the mutual promises contained herein, the parties
hereto agree as follows:
A. Definitions
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(1) VLI Policies - The VLI Policies are flexible premium variable life
insurance policies issued by Metropolitan and listed in the attached
Schedule A as amended from time to time.
(2) Variable Contracts - Other variable contracts issued by Metropolitan which
the Distributor may from time to time underwrite and make available to
Broker for distribution and which are listed in the attached Schedule A as
amended from time to time, including variable annuity, variable life
insurance, and other variable insurance contracts and certificates.
(3) Registration Statements - Registration statements and amendments filed with
the Securities and Exchange Commission relating to VLI Policies or Variable
Contracts, including those for any relevant funding vehicle.
(4) Prospectus - The prospectuses and Statements of Additional Information
included within the Registration Statements referred to herein or filed
pursuant to Rules 424 and 497 under the Securities Act of 1933, as amended.
(5) 1934 Act - The Securities Exchange Act of 1934, as amended.
(6) SEC - the Securities and Exchange Commission.
B. Representations by Distributor and Broker
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Both Distributor and Broker agree to comply with all applicable rules and
regulations of the National Association of Securities Dealers, Inc. ("NASD"),
federal and state securities laws, and insurance laws, as well as with all other
state or federal laws, rules or regulations that are now or may hereafter become
applicable to the transactions which are the subject of this Agreement.
C. Agreements of Distributor
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(1) Distributor hereby authorizes Broker, during the term of this Agreement, to
solicit applications for the VLI Policies and Variable Contracts listed in
the attached Schedule A, as amended from time to time, provided that there
is an effective Registration Statement relating to such VLI Policies and
such other Variable Contracts and, provided further, that Broker shall not
solicit applications for VLI Policies or Variable Contracts except in those
states or jurisdictions in which such
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VLI Policies or Variable Contracts are qualified for sale under all applicable
securities and insurance laws as listed in the attached Schedule A, as amended
from time to time. Broker understands that no territory is exclusively assigned
hereunder and that Distributor may enter into agreements with other brokers
regarding the sale of such VLI Policies and Variable Contracts.
(2) Distributor, during the term of this Agreement, will
notify Broker of the issuance by the SEC of any stop order with respect to a
Registration Statement or the initiation of any proceedings for that purpose or
for any other purpose relating to the registration and/or offering of VLI
Policies and Variable Contracts and of any other action or circumstances that
may prevent the lawful sale of the VLI Policies and the Variable Contracts in
any state or jurisdiction.
(3) During the term of this Agreement, Distributor shall advise Broker of any
amendment to any Registration Statement or supplement to any Prospectus.
(4) Distributor reserves the right at any time to suspend sales or withdraw the
offering of VLI Policies and Variable Contracts in its discretion and
without prior notice to the Broker.
(5) The performance or receipt of services pursuant to this Agreement shall in
no way impair the absolute control of the business and operations of each
of the parties by its own Board of Directors.
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Pursuant to the foregoing, Metropolitan shall specifically retain ultimate
authority:
(i) to appoint and discharge agents marketing insurance on its behalf;
(ii) to direct the marketing of its insurance products and services;
(iii) to review and approve all advertising concerning its insurance
products and services;
(iv) to underwrite all insurance policies issued by it;
(v) to cancel risks;
(vi) to handle all matters involving claims adjusting and payment;
(vii) to prepare all policy forms and amendments; and
(viii) to maintain custody of, responsibility for and control of all
investments.
D. Agreements of Broker
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(1) Broker represents and agrees that it is a registered broker/dealer
under the 1934 Act and in such other jurisdictions as the business transacted by
it requires, is a member in good standing of the NASD, has obtained any other
approvals, licenses, authorizations, orders or consents which are necessary to
enter into this Agreement and to perform its duties hereunder, and is bonded as
required by all applicable laws and regulations. Broker further represents that
the agents or representatives of Broker who will be soliciting
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applications for VLI Policies and Variable Contracts will be duly licensed
registered representatives or principals of Broker, will be appropriately
licensed under applicable insurance laws and will have received a level of
qualification with the NASD appropriate for the relevant VLI Policies and
Variable Contracts.
(2) Commencing at such time as Distributor and Broker shall agree upon,
Broker agrees to use its best efforts to find purchasers of the VLI Policies and
Variable Contracts. In meeting its obligation to use its best efforts to solicit
applications for the VLI Policies and Variable Contracts, Broker shall, during
the term of this Agreement, engage in the following activities:
(a) Continuously utilize those training, sales, advertising, and
promotional materials which have been approved by the Distributor;
(b) Establish and implement reasonable procedures for periodic
inspection and supervision of sales practices of its agents or representatives
and submit periodic reports to Distributor, as may be requested, on the results
of such inspections and the compliance with such procedures; provided however
that Broker shall retain sole responsibility for the supervision, inspection and
control of its agents and representatives;
(c) Take reasonable steps to ensure that the various representatives
appointed by it shall not make recommendations to an applicant to purchase a VLI
Policy or a
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Variable Contract in the absence of reasonable grounds to believe that the
purchase of a VLI Policy or a Variable Contract is suitable for such applicant
consistent with the suitability guidelines provided by Distributor from time to
time.
(3) Only initial premiums or purchase payments for VLI Policies or
Variable Contracts shall be collected by agents or representatives of Broker and
shall be remitted promptly in full together with the appropriate applications,
forms and any other required documentation to an office designated by the
Distributor. Remittances will be made pursuant to the procedures described in
the relevant Prospectus. Checks or money orders in payment of premiums or
purchase payments shall be drawn to the order of "Metropolitan Life Insurance
Company" (or "Metropolitan Life"). To the extent that any premiums or purchase
payments for VLI Policies or Variable Contracts are collected directly by Broker
or its agents or representatives, Broker shall at all times hold such premiums
or purchase payments in a fiduciary capacity and transfer such premiums or
purchase payments to an office designated by Distributor within 30 days from the
date of collection. Broker acknowledges that Distributor shall have the
unconditional right to reject, in whole or in part, any application for a VLI
Policy or a Variable Contract. In the event Distributor rejects an application,
Distributor will immediately return any payment directly to the purchaser and
Broker will be notified of such action. In the event that any purchaser of a VLI
Policy or a Variable Contract elects to return
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such VLI Policy or Variable Contract pursuant to any law or contractual
provision, any payment made will be refunded to the purchaser and Broker will be
notified of such action.
(4) Broker shall act as an independent contractor, and nothing herein
contained shall constitute Broker, its agents or representatives, or any
employees thereof as employees of Distributor in connection with the
solicitation of applications for VLI Policies or Variable Contracts. Broker, its
agents or representatives, and its employees shall not hold themselves out to be
employees of Distributor in this connection or in any dealings with the public.
Broker is not a principal underwriter or agent of any Metropolitan separate
account or any funding medium therefor.
(5) Broker agrees that any material it develops, approves or uses for
sales, training, explanatory or other purposes in connection with the
solicitation of applicants for VLI Policies or Variable Contracts hereunder
other than generic advertising material which does not make specific reference
to Distributor, the VLI Policies or the Variable Contracts will not be used
without the prior written consent of Distributor.
(6) Solicitation and other activities by Broker shall be undertaken only in
accordance with applicable laws and regulations. Broker represents that no
commissions, or portions thereof, or other compensation for the sale of VLI
Policies or Variable Contracts will be paid to any person or entity which is not
duly licensed and appointed by Metropolitan as a life
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insurance and variable contract broker or agent of Metropolitan in the
appropriate states or other jurisdictions. Broker shall ensure that such agents
or representatives fulfill any training requirements necessary to be licensed.
Broker understands and acknowledges that neither it nor its agents or
representatives is authorized by Distributor to give any information or make any
representation in connection with this Agreement or the offering of the VLI
Policies or the Variable Contracts or any relevant funding vehicle other than
those contained in the Prospectus or other solicitation material authorized in
writing by Distributor and agrees to take all reasonable steps necessary to
insure that no representations are made or information given that is not
contained in the Prospectus or such other solicitation material. The Prospectus
for a VLI Policy or Variable Contract, for any relevant funding vehicle, and any
supplements or amendments thereto, shall be delivered to every applicant for
that VLI Policy or Variable Contract, provided that any Statement of Additional
Information shall be delivered only to any applicant who requests one except
where otherwise required by law.
(7) Neither Broker nor its agents or representatives shall have authority
on behalf of Distributor to: make, alter or discharge any VLI Policy, Variable
Contract or other form; receive any monies or payments due, or to become due, to
Metropolitan except as set forth in Section D(3) of this Agreement; adjust or
settle any claim or commit Distributor with respect thereto, or bind Distributor
or any of its affiliates in
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any way; or enter into legal proceedings in connection with any matter
pertaining to Distributor's business without its prior written consent, unless
Broker is named in such proceedings. Broker shall not expend, nor contract for
the expenditure of, the funds of Distributor nor shall Broker possess or
exercise any authority on behalf of the Distributor other than that expressly
conferred on Broker by this Agreement.
(8) Broker agrees to prepare any forms necessary to comply with applicable
state insurance laws or regulations or received from Distributor in connection
with the sale of VLI Policies or Variable Contracts as replacement for other
insurance or annuity products and to send such forms to Distributor. In the
alternative, if such forms are not required but information with respect to
replacement is required, Broker will transmit such information in writing to
Distributor. Broker further agrees to notify Distributor when sales of VLI
Policies or Variable Contracts are replacement contracts. Such notification
shall not be later than the time that Broker submits to Distributor the
information required to calculate commissions payable hereunder.
(9) Broker agrees to furnish Distributor or any appropriate regulatory
authority with any information or reports in connection with its
responsibilities under this Agreement which such person may reasonably request
in order to ascertain whether the operations of Distributor related to the VLI
Policies and Variable Contracts are being conducted in a manner consistent with
applicable laws or regulations.
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E. Compensation
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(1) Distributor shall arrange for payment of commissions to Broker or its
designee as compensation for the sale of each VLI Policy or Variable Contract
sold by an agent or representative of Broker. The amount of such compensation
shall be paid monthly and shall be based on a schedule which is determined by
agreement of Distributor and Broker. Distributor shall identify to Broker with
each such payment the name or names of the agent(s) or representative(s) of
Broker who solicited each VLI Policy or Variable Contract covered by the
payment. Broker will be responsible for issuing checks, statements or forms for
tax purposes and other administrative duties connected with compensation of such
agents or representatives.
(2) Any indebtedness of Broker to Distributor shall be a first lien against
any monies payable hereunder. The right of Broker, or any person claiming
through Broker to receive any compensation provided by this Agreement, shall be
subordinate to the right of Distributor to offset such compensation against any
indebtedness of the Broker to Distributor.
(3) Neither Broker nor any of its agents or representatives shall have any
right to withhold or deduct any part of any purchase payment it shall receive
for purposes of payment of commission or otherwise.
(4) No compensation shall be payable, and any compensation already paid
shall be returned to Distributor on request, under each of the following
conditions:
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(a) If Distributor, in its sole discretion, determines not to issue
the VLI Policy or Variable Contract applied for,
(b) if Distributor refunds the premium paid by the applicant, upon
the exercise of applicant's right of withdrawal pursuant to any
"free-look" privilege,
(c) if Distributor refunds the premium paid by applicant as a result
of a complaint by applicant, recognizing that Distributor has
sole discretion to refund premiums paid by applicants, or
(d) if Distributor determines that any person signing an application
who is required to be licensed or any other person or entity
receiving compensation for soliciting purchases of the VLI
Policies or Variable Contracts is not duly licensed to sell the
VLI Policies or Variable Contracts in the jurisdiction of such
attempted sale.
(5) Broker, either directly or by reimbursing Distributor on request, shall
pay all other expenses of soliciting applications for the VLI Policies or
Variable Contracts, including but not limited to expenses relating to sales
literature and advertisements originated by Broker.
F. Complaints and Investigations
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(1) Broker and Distributor jointly agree to cooperate fully in any
insurance regulatory investigation or proceeding or
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judicial proceeding arising in connection with the VLI Policies or the Variable
Contracts. Broker and Distributor further agree to cooperate fully in any
securities regulatory investigation or proceeding or judicial proceeding with
respect to Broker, Distributor, their affiliates and their agents or
representatives to the extent that such investigation or proceeding is in
connection with the VLI Policies or Variable Contracts.
(2) Both the Broker and Distributor jointly agree to investigate any
customer complaint in connection with the VLI Policies or the Variable
Contracts. The term customer complaint shall mean an oral or written
communication either directly from the purchaser of or applicant for a VLI
Policy or a Variable Contract or his/her legal representative, or indirectly
from a regulatory agency to which he or she or his/her legal representative has
expressed a grievance.
(3) Such cooperation referred to in Sections F(1) and F(2) of this
Agreement shall include, but is not limited to, each party promptly notifying
the other of the receipt of notice of any such investigation, proceeding, or
customer complaint, forwarding to the other party a copy of any written
materials in connection with the matter (or a written statement of an oral
complaint) and such additional information as may be necessary to furnish a
complete understanding of same, and, in the case of a customer complaint,
consulting with the other party, prior to responding thereto, and, thereafter,
providing each other with copies of all written responses.
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(4) Notwithstanding Sections F(1), F(2) and F(3), Distributor retains
discretion to resolve complaints or grievances of applicants, policyholders or
others with respect to the VLI Policies and Variable Contracts.
G. Records and Administration
--------------------------
(1) Once a VLI Policy or Variable Contract has been issued, it will be
mailed promptly to the applicant, accompanied by any applicable Notice of
Withdrawal Right and additional appropriate documents. Distributor will confirm
or cause to be confirmed to customers of Broker all VLI Policy and Variable
Contract transactions, as and to the extent legally required and will administer
all of the VLI Policies or Variable Contracts after they have been delivered,
but may from time to time require assistance from Broker.
(2) Broker will maintain all books and records as required by Rules 17a-3
and 17a-4 under the 1934 Act, except to the extent that Distributor may agree to
maintain any such records on Broker's behalf. Records subject to any such
agreement shall be maintained by Distributor as agent for Broker in compliance
with said rules, and such records shall be and remain the property of Broker and
be at all times subject to inspection by the SEC in accordance with Section
17(a) of that Act. Nothing contained herein shall be construed to affect
Metropolitan's right to ownership and control of all pertinent records and
documents pertaining to its business operations including, without
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limitation, its operations relating to the VLI Policies and Variable
Contracts, which right is hereby recognized and affirmed. Distributor and
Broker agree that each shall retain all records pertaining to Metropolitan's VLI
Policies and Variable Contracts operations as required by the 1934 Act, and the
rules and regulations thereunder and by any other applicable law or regulation,
as confidential information and neither party shall reveal or disclose such
confidential information to any third party unless such disclosure is authorized
by the party affected thereby or unless such disclosure is expressly required by
applicable federal or state regulatory authorities, except, however, that
nothing contained herein shall be deemed to interfere with any document, record
or other information which by law, is a matter of public record.
H. Indemnification
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(1) Distributor will indemnify and hold harmless Broker from any and all
losses, claims, damages or liabilities (or actions in respect thereof), to which
Broker may become subject, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Prospectus for any of the VLI Policies, Variable Contracts or any relevant
funding vehicle or any amendments or supplements thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the
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statements therein not misleading; and will reimburse Broker for any legal or
other expenses reasonably incurred by it in connection with investigating or
defending against such loss, claim, damage, liability or action in respect
thereof; provided, however, that Distributor shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or action arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any such Prospectus, amendment or
supplement in reliance upon and in conformity with information furnished by
Broker specifically for use in the preparation thereof.
Distributor shall not indemnify Broker for any action where an applicant
for any of the VLI Policies or Variable Contracts was not furnished or sent or
given, at or prior to written confirmation of the sale of a VLI Policy or
Variable Contract, a copy of the appropriate Prospectus(es), any Statement of
Additional Information, if requested, and any supplements or amendments to
either furnished to Broker by Distributor. The foregoing indemnities shall, upon
the same terms and conditions, extend to and inure to the benefit of each
director and officer of Broker and any person controlling it.
(2) Broker will indemnify and hold harmless Distributor against any losses,
claims, damages or liabilities (or actions in respect thereof), to which
Distributor may become subject, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
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untrue statement or alleged untrue statement of any material fact contained in
the Prospectus for any of the VLI Policies, Variable Contracts or any relevant
funding vehicle or any amendments or supplements thereto, or arise out of or are
based upon the omission or alleged omission to state therein or necessary to
make the statements therein not misleading, in each case to the extent that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in any such Prospectus, amendment or supplement, in reliance upon and in
conformity with information furnished to Distributor by Broker specifically for
use in the preparation thereof; and will reimburse Distributor for any legal or
other expenses reasonably incurred by it in connection with investigating or
defending against any such loss, claim, damage, liability or action. The
foregoing indemnities shall, upon the same terms and conditions, extend to and
inure to the benefit of each director and officer of Distributor and any person
controlling it.
(3) Broker shall indemnify and hold harmless Distributor from any and all
losses, claims, damages or liabilities (or actions in respect thereof) to which
Distributor may be subject, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or result from
negligent, improper, fraudulent or unauthorized acts or omissions by Broker, its
employees, agents, representatives or principals, including but not limited to
improper solicitation of applications for the VLI Policies or Variable
Contracts, except
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as stated herein. Broker shall indemnify and hold harmless Distributor for any
losses, claims, damages or liabilities (or actions in respect thereof) to which
Distributor may become subject, insofar as the losses, claims, damages or
liabilities (or action in respect thereof) arise out of or are based upon any
unauthorized use of sales materials or advertisements or any oral or written
misrepresentations or any unlawful sales practices concerning the VLI Policies
or Variable Contracts by Broker, its employees, agents, representatives or
principals, except as stated below. Broker shall indemnify and hold Distributor
harmless for any penalties, losses or liabilities resulting from Distributor
improperly paying any compensation under this Agreement, unless such improper
payment was caused by Distributor's negligence or willful misconduct. Unless
such improper payment was caused by Broker's negligence or willful misconduct,
the indemnity under the immediately preceding sentence shall be limited to all
compensation payable to and by Broker pursuant to this Agreement. The foregoing
indemnities shall, upon the same terms and conditions, extend to and inure to
the benefit of each director and officer of Distributor and any person
controlling it.
(4) Promptly after receipt by an indemnified party of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party, notify the indemnifying
party in writing of the commencement thereof; but the omission so to notify the
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indemnifying party shall not relieve it from any liability which
it may otherwise have to any indemnified party. In case any such action shall be
brought against any indemnified party, and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to
participate in, and, to the extent that it shall wish, jointly with any other
indemnifying party, similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party. After notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party for any legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof other than reasonable costs of
investigation.
I. Term of Agreement
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(1) This Agreement shall continue in force for one year from its effective
date and thereafter shall automatically be renewed every year for a further one
year period; provided that either party may unilaterally terminate this
Agreement with or without cause upon thirty (30) days' written notice to the
other party of its intention to do so.
(2) Upon termination of this Agreement, all authorizations, rights and
obligations shall cease except (a) the agreements contained in Section F, G and
H hereof; and (b) the obligation to settle accounts hereunder. Except with
respect to records maintained by or on behalf of Broker pursuant to Rules 17a-3
and
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17a-4 under the 1934 Act, Broker shall return to Distributor, within 30 days
after the effective date of termination, any and all records in its possession
which have been specifically maintained in connection with Metropolitan's
operations related to the VLI Policies or Variable Contracts.
J. Assignability
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This Agreement shall not be assigned by either party without the written
consent of the other.
K. Modification
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This Agreement may only be modified in writing signed by both parties.
L. Notices
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Notices to be given hereunder shall be addressed to:
Metropolitan Life Insurance Company
Xxx Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention:
Attention:
M. Governing Law
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This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
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In Witness Whereof, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
METROPOLITAN LIFE INSURANCE COMPANY
(Distributor)
By___________________________________
(Broker)
By_________________________________
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